What's an employee to do? Part 1
During the recession of 1990-1991, and the period of very slow growth that followed, it became conventional wisdom that it was wrong to try to retain key employees through a slowdown. If there was no work for an employee to do--even just for fifteen minutes--that employee should be let go.
In previous decades, companies made an effort to keep valuable employees. They'd find other work for them to do--they'd even take on projects that could barely break even, just to keep their workers working. It was considered critical for retaining the skills that the company would need when the economy recovered.
In the 1990s, the thinking changed. Managers and (especially) investors decided that, if new work turned up sometime in the future, it would always be possible to hire someone to do it.
I spent that whole decade hoping that this thinking would turn out to be wrong--that companies would pay a price for letting valuable employees go just because there was a brief period during which there wasn't much work for them to do.
Sadly, the experience of the dotcom boom seems to show that they were right and I was wrong.
Maybe I was technically right--it's quite possible that it cost more in salary, options, signing bonus, and perks to hire a first-rate employee in 1999 than it would have cost to carry a skilled worker through the mid-1990s--but it almost doesn't matter. When they're making money, companies can (and will) pay whatever it costs to hire the employees they need. A hugely profitable company doesn't need to justify its payroll. A money-losing company can barely justify payroll expenses that add directly to the bottom line.
(There may even have been some companies that went bust largely because they couldn't find (or couldn't afford) the skilled workers that they needed. But that simply isn't visible to the investors who decide these things. By the time the company is faltering that badly, the Wall Street investors have already dumped the stock. Nobody cares if the root cause was excessive layoffs in the last recession--that's ancient history.)
There are a few strategies available to employees for dealing with this reality that I'll talk about in more detail in part 2, but the central point is that companies no longer have the option to carry employees through an economic slowdown. Their investors simply won't allow it. No argument or careful analysis showing that certain skills would be impossible to find or prohibitively expensive to recreate will make a difference: The only way for management to justify an employee is to show how that employee makes money for the company right now.
Many valuable employees don't. They might be designing the products the company will be selling two years from now. They might be reducing future expenses by raising quality or heading off lawsuits. They might simply be making other employees more productive. These things are all valuable, and most managers know they're valuable. Most managers will fight tooth-and-nail to keep these employees. They'll even be successful to a limited extent. But during an economic slowdown, employees like that are vulnerable every day.
If you're an employee, look at your job and figure out how you make money for the company every day. Try to find a way to move to a profit center.
During good times it can work to educate people on how you add value, even if your job doesn't directly show a profit. But during a slowdown, the only thing companies value--the only thing they are permitted to value--is the ability to make money.
In part 2 I talk more broadly about how being an employee has changed.